The UK engineering firm Rolls-Royce is resuming payouts to shareholders for the first time since the Covid-19 pandemic hit its operations.
After “strong results” in 2024, Rolls-Royce has announced it will pay a dividend of 6p a share to investors. It also plans to spend £1bn on a share buyback scheme – another way of returning cash to shareholders.
The news comes as Rolls-Royce announced that earnings rose by more than 50% last year – with underlying operating profit up to £2.5bn, from £1.6bn in 2023.
The chief executive, Tufan Erginbilgiç, said Rolls-Royce was being transformed into a “high-performing, competitive, resilient, and growing business”.
He said: "All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging.
"We are moving with pace and intensity. Based on our 2025 guidance, we now expect to deliver underlying operating profit and free cashflow within the target ranges set at our capital markets day, two years earlier than planned.
"Significantly improved performance and a stronger balance sheet gives us confidence to reinstate shareholder dividends and announce a £1bn share buyback in 2025."
It is quite a turnaround since Covid-19 buffeted Rolls-Royce, which makes and services jet engines, runs a defence arm, and produces a range of power and propulsion products, including nuclear propulsion plants for the Royal Navy’s nuclear submarines. It is also developing small modular nuclear reactors.
Rolls-Royce suspended dividend payments in April 2030, as its airline customers kept flights grounded because of the pandemic.
Shares in Rolls-Royce are soaring at the start of trading, as investors hail its financial recovery.
Rolls-Royce’s stock has jumped by more than 15% to 735p a share.
We are expecting to learn later today whether Gatwick airport will be allowed to open a second runway.
The transport secretary, Heidi Alexander, is due to announce today whether she has granted a development consent order that could allow more than 100,000 extra flights a year at the West Sussex airport.
Gatwick wants to modify an emergency runway and taxiway to allow it to be used alongside its existing main runway. The agenda • 12.30pm ECB minutes from January meeting • 1.30pm US GDP (first revision) for Q4 • 1.30pm US initial jobless claims data We'll be tracking all the main events throughout the day …
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